Saturday, July 19, 2014

All Things 787 Mega Update

First let me start out this update by saying that my prayers and condolences are with the victims and families of MH17.  I do hope that there is swift justice for all the responsible perpetrators of this awful crime.

Since my last blog post about 3 weeks ago there has been much activity with the 787.  Boeing posted 15 total deliveries in June and a total of 30 in the 2nd quarter.  This total included the first delivery of the 787-9 to Air New Zealand as well as delivering a 787 that completed a customers full order (China Southern receiving it's 10th 787 from an order of 10 that they placed).  Boeing has delivered 48 787s through the end of June (51 to date) and overall 787 deliveries to June 2014 stands at 162 (165 to date).

AS attention now turns to the last half of 2014, we will see the first 787-9 with GE engines delivered to United Airlines.  The first aircraft for UA, ZB167 (LN 181,N38950) performed its first flight on July 11th and is now into the F&R/ETOPs testing for the GEnx powered version of the 787-9. This aircraft should be delivered to United by the end of August.  ANA should also be receiving its first 787-9 later this month.  It will take delivery of ZB197 (LN 146, JA830A) after it had completed the F&R/ETOPs flight testing for the Roll Royce powered version of the -9.  It had to go through change incorporation and is at the final stages of production testing.

I do anticipate that Boeing can deliver around 10 787s in July including the one to ANA.  It already has delivered 3 aircraft and at least 5 more look to be ready for delivery over the next 11 days.  Including the aforementioned 787-9 for ANA other deliveries should include:

Air Canada - 1
Air India - 1
Ethiopian Airlines - 1
Kenya Airways - 1
Qatar Airways - 1

Boeing needs to deliver and average of 10.3 787s in the last 6 months of 2014 in order  to make good on it's 10 delivery projections for the Dreamliner.

July 2014 also meant that the who's who of the Aerospace world trekked to Farnborough, UK for the bi-annual Farnborough Air Show except for your trully (I still have my day job to worry about).  Though I was hoping for some more 787 orders (particularly the -8 and -10), there were still come decent 787 orders coming from lessor CIT for 10 787-9d and MG Aviation (Arkia Airlines) for 2 787-9.  There is an LoI for 6 787-9 from lessor Avolon.  However, baring a major order, Boeing's 787 book to bill will be significantly lower than 1 this year as the orders are only trickling in.  Certainly they will receive many more orders for the aircraft but this may be stymied by the launch of the A330neo.  Boeing still has to study the effect that the launch may have on future 787s orders and how to mitigate.  Certainly, Boeing can improve the fuel efficiency of the -8 by continuing to take weight out of the aircraft as well as incorporating improvements from the 787-9 flight test program.  Boeing can also start equipping the -8 with the same hybrid laminar flow control technology that will be standard on the 787-9 and 787-10.  Adding this can make the 787-8 more attractive to customers when it comes to a decision between the A330neo and the 787-8.  As far as I know Airbus is not installing the technology on the A330neo as it is still trying to develop the technology.  While the A330neo has garnered 121 orders during the airshow, 50 of these is to Air Asia which only buys Airbus, and most of the rest were to lessors all of whom already have the 787 in their portfolio.  We will only know which aircraft will be preferred by operators when there is a head to head competition of the two airplanes for airline orders.  One such competition is coming up later this year when Delta will look to refresh its widebody fleet. Delta inherited Northwest Airline's 18 787-8 order when the two companies merged thus it will be interesting to see how this will be factored into the final decision by Delta's fleet managers and board.

Here's the final order tally from Farnborough (Boeing vs. Airbus only):

Okay Airlines - 6 x 737Max8 (Firm), 4 x 737-800 (Firm)
Monarch - 30 x 737Max8 (LoI)
Avolon - 6 x 787-9 (LoI), 5 x 737Max9 (LoI)
Air Lease Corp - 6 x 777-300ER (Firm), 20 x 737Max8 (Firm)
Intrepid Aviation - 6 x 777-300ER (LoI)
CIT - 10 x 787-9 (Firm)
Hainan Airlines - 50 x 737Max8 (LoI)
MG Aviation - 2 x 787-9 (firm)
Qatar Airways - 50 x 777-9X (Firm), 4 x 777F (LoI)
Air Algerie - 2 x 737-700C (Firm)

Air Lease Corp - 25 x A330-900neo (LoI), 60 x A320neo (Firm)
AerCap - 50 x A320neo (Firm)
IAG - 20 x A320neo (Firm)
AirAsiaX - 50 x A330-900neo (LoI)
Avolon - 15 x A330neo (LoI)
BOC Aviation - 43 x A320neo
CIT - 15 x A330neo (LoI), 5 x A321neo (LoI)
SMBC Aviation - 110 x A320neo (Firm), 5x A320 (Firm)
Air Mauritius - 4 x A350-900 (LoI)
Hong Kong Aviation - 40 x A320neo (Firm), 30 x A321neo (Firm)
Transaero - 12 x A330neo (LoI), 8 x A330 (LoI)
Unidentified - 4 x A330neo (LoI)

787 Full Production Table